Hit hard by this economic depression, I'm the polar opposite of wealthy. As such, I have no vested interest in defending high-earners. However, this is an economics blog, and I have to call out the Community Organizer for outright lying about the importance of high-earners to the economy. In his speeches devoted to class warfare, including the one at the Roanoke firehouse in which he infamously stated that "if you’ve got a business -- you didn’t build that", Obama has repeatedly inferred that the "wealthiest Americans", who he claims are the ones who benefit most from "tax cuts for the wealthy" (they're not, as the wealthiest Americans earn their money through capital gains, not wages), don't contribute the most to the economy. In fact, he's actually made the claim that they contribute least.These are Obama's exact words from a speech given from the East Room on July 9, 2012:
By the way, these tax cuts for the wealthiest Americans are also the tax cuts that are least likely to promote growth.Least likely to promote growth? This is an bold-faced lie.
The earners of the top income tax bracket are members of the "2%", a block of professionals and small business owners who outnumber Occupy Wall Street's arch nemesis, the dreaded "1%" (which in reality should be called the "99 and 9/10%"), 100 to 1. This income group provides jobs, but, in terms of contributing to the economy, its most important characteristic is its spending. No income group spends more. Therefore, no income group is more important to the growth of our economy, which is 70% consumer spending.
You lie, Mr. Obama.
One man's terrorist is another man's freedom fighter.
ReplyDeleteJust as you call the 99% vs the 1% class warfare, the top 80% against the bottem 20% is also class warfare.
Class warfare? Isn't that what the 1% have been doing to the 99% been doing for 30+ years?
ReplyDeleteSince 1979 given the increase in worker productivity the median family wage should be 92K not 50K.
BTW wasn't Reagan supposed get rid of all those loopholes for the rich in order to lower the top marginal tax rate from 72% to 50%. How did those loopholes sneek back into the taxcode and the top marginal rate is now 35%.
With tax revenues as a percentage of GDP the lowest they have been since the Eisenhower admin. somebody isn't paying their fare share. Would you not agree or do you believe that supply side trickle down economics actually work?
Supply-side economics argues that economic growth can be most effectively created by lowering barriers for people to produce (supply) goods and services. That is not my argument. My argument is that, in an economy that's 70% consumer spending, raising taxes on the income group that *spends most* is economic folly.
DeleteWell, you have it backwards. If the money were more evenly distributed, it would be spread out among people more likely to employ the money on consumption.
Deletehttp://roundtable.nationaljournal.com/2012/05/the-inequality-speech-that-ted-wont-show-you.php
"Another reason this idea is so wrong-headed is that there can never be enough superrich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the median American, but we don't buy hundreds or thousands of times more stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. Like everyone else, we go out to eat with friends and family only occasionally.
I can't buy enough of anything to make up for the fact that millions of unemployed and underemployed Americans can't buy any new clothes or cars or enjoy any meals out. Or to make up for the decreasing consumption of the vast majority of American families that are barely squeaking by, buried by spiraling costs and trapped by stagnant or declining wages.
Here's an incredible fact. If the typical American family still got today the same share of income they earned in 1980, they would earn about 25% more and have an astounding $13,000 more a year. Where would the economy be if that were the case?"
By your own logic, then, the group that spends 100% of what they earn should be taxed nothing. Your logic also strengthens the point that if the top income group payed the middle and lower classes higher wages and salaries then the market would be even more flexible and grow in any of several segments of the economy, not just in million dollar mansions, yachts, and italian sports cars, and the stock casinos.
ReplyDeleteYou're completely ignoring what I'm saying. I didn't say that the group that spends 100% of what they earn should be taxed nothing. I said "My argument is that, in an economy that's 70% consumer spending, RAISING TAXES on the income group that spends most is economic folly". Raising taxes.
DeleteYou think that plumbers, architects, and CPA's own million dollar mansions, yachts, and Italian sports cars? LOL!
I'm not ignoring what you said. I said "by your own logic" which means you didn't say it you inferred it.
ReplyDeleteI'm saying that if you are worried about consumer spending vs. taxes it is a moot point. No matter whether the money is spent on consumer goods or it is spent in taxes it is still spent creating demand. More than likely the 2% will buy what they want without regard to the tax rate and any difference will be saved. So again your point does not hold any water.
So what are you saying? That we need more tax brackets on the higher wage earners say the upper half of 1 percent or the upper 3rd, 4th....
You need to try a refresher course in simple math. To defend the 1% because they spend half their disposable income as compared to the middle class who spend 100% is white washing or statistical flim flam.
How many plumbers do you know in the top 2%. LOL Yes there are architects and CPA's that own italian sports cars million and dollar mansions. I would suppose you would have to be the top of the top for the yachts.
In any case your point has no merit. The graduated marginal income tax is set up that way for a reason. The more marginally wealthy you are the higher the tax bracket and its corresponding rate.
"No matter whether the money is spent on consumer goods or it is spent in taxes it is still spent creating demand."
DeleteNo, consumer demand and government demand aren't equal. $1 a consumer spends has a "net value" of $1. $1 the Government spends has a net value of less than $1 because, in order for the government to exchange that Dollar, it had to pay someone to seize it from a taxpayer, pay someone to circulate it through the bureaucracy, pay someone to track it as it circulated through the bureaucracy, pay someone to decide what to purchase with the Dollar, pay someone place an order, and so on and so forth.
"So what are you saying? That we need more tax brackets on the higher wage earners say the upper half of 1 percent or the upper 3rd, 4th...."
No, I'm saying that raising taxes on high wage earners during an economic depression is bad policy.
"You need to try a refresher course in simple math. To defend the 1% because they spend half their disposable income as compared to the middle class who spend 100% is white washing or statistical flim flam."
I merely stated that high wage earners spend more than any other income group.
"How many plumbers do you know in the top 2%."
Master plumbers make a ton of money. A master plumber in a dual income household would be in the highest tax bracket in states with the highest cost of living. I used plumbers to demonstrate the large spread between the top of the 99th percentile and the bottom of the 98th percentile.
"The graduated marginal income tax is set up that way for a reason."
I merely said the income group that spends most, the highest tax bracket SHOULDN'T BE TAXED MORE THAN THEY ARE in an economic depression.
You have no idea where real wealth and, hence, real demand (demand in the economic sense equals ability to pay) comes from. The most obvious difference between government spending (from government demand) and private sector spending is that price discovery is a much different process. The value that government assigns to goods is much different than the value that we do. We have to watch our bottom line, our own solvency. Governments say they do, but in the end they simply take what they want. Government demand competes with my demand and I, not having the power to simply take what I want, cannot compete. Also, it is a zero sum world. There is a limited supply of capital (the capital stock, or the excess fund) in the world because the natural resources and means to procure them are limited. Government demand is created by taking from someone else's demand, and generally that someone else, given the marginal immediacy of need coefficient and the imperfection of human decision making, has a much better capacity to judge what to do with their own capital than does the government. Government demand and private demand is infinitely different. And government demand is not only a function of time (as the rate of interest it must pay to finance its debt) but is also a function of private demand because, well, there is only so much it can take.
Deleteon war and conquest: in the realm of human affairs one also needs a pretext. it is important to give it the rank of a universal imperative or of a divine commandment. The range of choices is not great; either it is that we must defend ourselves, or that we have an obligation to help others, or that we are fulfilling heaven's will. the optimal pretext would link all three of the motives. Flights to Freetown
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You spambots are unbelievable. Yeah, someone is going to buy an airline ticket from a robot that spews unintelligible garbage. Because of the sleazebag who programmed you, I'm going to have to start approving comments before they're published. Go to Hell.
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